There are storm clouds on the horizon for the Irish beef market, according to managing director of ABP Ireland and Poland Kevin Cahill.
Despite strong beef prices at the moment, how consumers shop as a result of current inflationary pressures may affect the trade, Cahill told the Irish Farmers Journal at a Meat Business Women networking event last week.
“There’s a lot of confidence out there at the moment when you look at weanling prices. There’s also a lot of storm clouds on the horizon when you look at the recessionary impact that all of the energy pricing and other inflationary impacts are having on the market,” he said.
“As we look out into the market, it’s hard not to be a little bit concerned about the potential impact of recession.”
He explained how consumers are likely to either trade down or trade out of beef as disposable incomes across households in Europe are hit.
“We are a little bit concerned about that, but confidence has been high, prices have been quite stable; we are always optimistic about where things are going.
“There’s the impact of international markets to be taken into account so we’ll try to be as positive as we can but we’ll always have a cautionary note around what’s happening in the marts.”
Cahill said that ABP’s “activity levels” are in line with what’s happening nationally and that the annual kill will more than likely be up this year.
“When the national figures come in, which will be slightly up this year, we’ll be probably similar to that,” he said.
As a business, he said ABP is feeling the effects of inflation with regards to the cost of labour, increases in gas prices and associated electricity costs.
“It’s an interesting time. There’s lots of things to be concerned about but typically I think the Irish meat industry faces into those things innovatively and we’ll try to be as positive as we can,” he said.